I rent out both of my homes from time to time. One is on the beach and one is in the mountains. They each draw different types of guests at different times of the year.
None of the space is shared with mine with exception to access to the pool.
Pros: Additional Income, Positive use of space that I would not use, providing a resource to the local community, Returning customers, Pride in sharing the homes you have, Learning the hospitality industry, some good conversations, meeting some interesting people.
Cons: Tax impact, Community Zoning issues, Umbrella Insurance Policy to cover risk, Additional Maintenance break/fix, Having to turn it over between guests, Hiring someone else to turn it over if I am not around, Being available to answer guests needs, Not having access to spaces in my home that I may need to, Not knowing who is in your house, vetting out long term renters, In forming the guests when they don’t respect the rules, Having to deal with stupid guest damages/issues.
My biggest anxiety is “who am I renting to”. Long Term guest are gold. They have minimal turnover and needs. My Berkshires property is typically long term rented for July and August to a musician from the BSO which plays Tanglewood 10 minutes from the property. Visiting Nurses are also about a 3 month stay there as it is 15 minutes from a Medical Center. The beach property is a lot of work turnover , but is always in demand from Memorial day to Labor Day.
AirBnb/VRBO are the least desired by me due to the constant flipping and having little control over who you make it available to.
The AirBNB and VRBO platforms are great, but they take a chunk of your change. Put in a Security Deposit that is refundable if no damage and pass a cleaning fee on to the guest. Typically $50 cleaning per stay for short stays and $100 for long term.
Initial investment may have been about $5000. Costs run about 200–300 per year for incidentals and additional utilities. I net about $25000 annually.
The Cons list does seem longer than the Pros list. You truly want to do this and keep your mind in the game and truly manage it to be successful.